National Republican Senatorial Committee (NRSC) Press Secretary Amber Marchand issued the following statement in response to Illinois State Treasurer and failed mob banker Alexi Giannoulias’ (D-IL) new television ad, which features President Barack Obama encouraging Illinois voters to “trust him.”

“Is this the ‘change’ that President Obama believes in? After telling Americans that our country doesn’t need another banker in Washington, he wants Illinois voters to elect a failed mob banker who loaned millions of dollars to known criminals? How are Illinois voters supposed to ‘trust’ Giannoulias with their pocketbooks after he squandered millions of taxpayer dollars set aside for the state’s college fund? How does the President propose that Illinois voters ‘count on’ Giannoulias after he drove his own family’s business into the ground, forcing the government to pay for his risky loans and reckless behavior? Shooting hoops and calling his buddy from Chicago a ‘friend’ is one thing, but President Obama should know that Illinois voters deserve more than a reckless mob banker with a thin resume of experience in the U.S. Senate.”

Background Information:

Giannoulias’ Bank Loaned Millions To Convicted Felons:

Giannoulias’ Bank Made Loans To Mobster Michael “Jaws” Giorango, Who Was Convicted In 2004 For Running Prostitution Rings, And In 1988 On Illegal Gambling Charges. “Mr. Giannoulias and a spokesman confirm that the bank made mortgage loans to Michael Giorango for land in Florida and an office building on North Broadway just up the block from the bank. According to the FBI, Mr. Giorango was convicted in 2004 of helping run a nationwide ring of brothels and on bookmaking charges in 1988.” (Greg Hinz, “Alexi’s Business,” Crain’s Chicago Business, 3/13/06)

While Giannoulias Was A Senior Loan Officer, Broadway Bank Loaned About $20 Million To Two Men Who Were Preparing To Serve Federal Prison Terms, Demitri Stavropoulos And Michael Giorango. “The family bank of Democratic Senate candidate Alexi Giannoulias loaned a pair of Chicago crime figures about $20 million during a 14-month period when Giannoulias was a senior loan officer, according to a Tribune examination that provides new details about the bank’s relationship with the convicted felons. Broadway Bank had already lent millions to Michael Giorango when he and a new business partner, Demitri Stavropoulos, came to the bank in mid-2004. Although both men were preparing to serve federal prison terms, the bank embarked on a series of loans to them.” (David Jackson, John Chase, And Ray Gibson, “$20 Million In Loans To Felons,” Chicago Tribune, 4/2/10)

• “Alexi Giannoulias Took A Senior Position At The Bank At About The Same Time And Used It As A Launching Pad For His Political Career.” (David Jackson, John Chase, And Ray Gibson, “$20 Million In Loans To Felons,” Chicago Tribune, 4/2/10)

The Giannoulias Family Bank Was Seized By The FDIC In April 2010 For “Conducting Its Business In An Unsafe And Unsound Manner”:

The FDIC Shut Down Broadway Bank On April 23, 2010. “Federal regulators have shut down the bank owned by the family of Alexi Giannoulias, the Democrat running for President Barack Obama’s former Senate seat. The Federal Deposit Insurance Corp. made the announcement on its website after the close of business Friday. Broadway Bank was heavy into real estate loans and lost $75 million last year. Regulators had given it until Monday to raise about $85 million in new capital. Giannoulias is a first-term Illinois treasurer and a former bank loan officer. Giannoulias says the bank was financially healthy when he left but has suffered the same as other community banks.” (“FDIC Shuts Down Bank Owned By Giannoulias Family,” The Associated Press, 4/23/10)

• The Total Cost To The FDIC To Take Over The Bank Was Estimated At $394.3 Million. “The bank’s branches will reopen Saturday as branches of the MB Financial Bank. The cost to the FDIC of the takeover is estimated at $394.3 million.” (Harry Siegel, “Giannoulias Bank Seized,” Politico, 4/23/10)

• The FDIC Posted A Sign On Broadway Bank’s Door Saying “Broadway Bank Is Conducting Its Business In An Unsafe And Unsound Manner.” “Federal bank regulators swooped in and swarmed Broadway Bank at closing time Friday. The sign on the door said it all: ‘Broadway Bank is conducting its business in an unsafe and unsound manner.’ ‘The reason why the bank failed is because it had significant losses in its acquisition development, as well as in its construction loans. That — coupled with the weak real estate market– is what happened to this institution,’ said the FDIC’s Rickey McCullough.” (Ben Bradley, “FDIC: Feds Take Over Giannoulias’ Family Bank,” ABC WLS, 4/24/10)

• The Chicago Tribune Criticized Giannoulias’ Claims That The Economy Was To Blame For The Bank’s Collapse, Saying It “Failed Mostly Because Of Its Own Mistakes.”Chicago Tribune, 4/27/10) “Giannoulias’ claim smacks of desperation. Anyone truly looking for culprits would start with the people who ran Broadway. Most banks have been able to weather the recession. This one failed mostly because of its own mistakes. Start with its exceptional concentration on lending for commercial real estate and construction. These can be lucrative in a boom, but anyone knows these sectors are highly vulnerable to downturns in the business cycle, which are as inevitable as falling leaves in autumn. Wise bankers don’t put too many eggs in that basket. Nor do they bet so heavily on brokered deposits, which are generally expensive to attract and prone to sudden flight. During Giannoulias’ years in banking, Broadway’s brokered deposits went from 53 percent of its assets to 80 percent.” (Editorial, “Who Killed Broadway Bank,”

Giannoulias Has Been Harshly Criticized For His Mismanagement Of Illinois’ Bright Start Education Savings Fund:

When Giannoulias Took Office He Promised To Revamp The Bright Start Program. “Labeling the state’s primary college savings program ‘one of the worst in the country,’ new state Treasurer Alexi Giannoulias is forecasting that it will become one of the best when a new management firm takes over this year. Giannoulias, who took office earlier this month, campaigned on a promise to revamp Bright Start, which allows investors in and out of state to save money for college and pay no taxes on any earnings.” (Adam Jadhav, “Changes In The Works For Illinois’ College Savings Program,” St. Louis Post Dispatch, 1/28/07)

Giannoulias Made The Final Decision To Choose Oppenheimer Funds To Manage The Program In March, 2007. “Giannoulias said New York-based OppenheimerFunds Inc. will replace current manager Legg Mason this summer, following the latest bidding of the Bright Start contract. The so-called ‘529’ program, administered by the treasurer’s office, allows parents to make tax-exempt contributions toward their childrens’ college educations. Assets in 142,776 accounts total $2.1 billion, after seven years of operation.” (Mike Ramsey, “College Savings Program To Change,” The State Journal-Register, 3/12/07)

• Giannoulias Predicted That The Fund Would Go From One Of The Worst To One Of The Best. “‘I really think it will go down as being one of the best 529 programs in the United States’ after the changes take effect this summer, Giannoulias told the Chicago Sun-Times on Sunday. ‘Not only are we getting a new fund manager with historically better-performing funds, but we’re upgrading from seven investment-portfolio options to 21 — and we’re doing it for significantly cheaper.’” (Chris Fusco, “State Is Polishing Up Bright Start: College Savings Plan To Get Lower Fees, New Manager,” Chicago Sun-Times, 3/12/07)

By Mid-December 2008, It Was Reported That One Of The Bright Start Funds Had Lost Over 21 Percent Of Its Value. “The phones are ringing at state treasurers’ offices as parents try to cope with the precipitous drop in their 529 college savings plans. Scott Burnham, a spokesman for Illinois Treasurer Alexi Giannoulias, said the state’s most aggressive plan fell by 21 percent as of Sept. 30, the last date for which he had data. It has fallen further since. Burnham said the state is advising parents with children entering college next year to defer their use of the money if they can, though he realizes ‘not everyone has that luxury.’” (Jo Napolitano, “College Savings Plans Take A Beating,” Chicago Tribune, 12/15/08)

Morningstar Analysts Found That Oppenheimer Had Invested The Fund In Mortgage-Backed Securities And Credit Default Swaps. “Morningstar analyst Eric Jacobson has done some digging into this Oppenheimer bond portfolio. In late December, just after Manioudakis left Oppenheimer as a portfolio manager, Jacobson reported that ‘something just didn’t add up.’ Even with the fund reporting a 20 percent investment in mortgage-backed securities, the large overall losses couldn’t be explained. Jacobson ties the losses to leverage used by fund managers. The fund had huge exposure to not only mortgage-backed securities, but credit default swaps.” (Terry Savage, “State Wants College Fund’s $85 Mil Back,” Chicago Sun-Times, 1/14/09)

Giannoulias Has Been Criticized For His Handling Of The $2 Billion College Investment Fund. “[Q]uestions remain about how much Giannoulias was on top of Oppenheimer’s investment strategies and what he did to encourage the firm to avoid putting Bright Start money into some of those more risky investments.” (John Chase, “Bright Start Funds Used For New SUV,” Chicago Tribune, 5/4/09)

The Losses To The College Savings Plan Were More Than Double What Had Been Previously Disclosed. “The losses in a mutual fund that was part of the Illinois Bright Start college savings plan totaled about $150 million in 2008, more than double what the state had previously disclosed. As a result, families will recoup about half of what they lost, where six months ago some expected to recover a higher percentage of their losses.” (Ameet Sachdev and John Chase, “College Fund Settlement Less Than Expected,” Chicago Tribune, 12/23/09)

Giannoulias’ Senate Primary Challenger Democrat David Hoffman On Giannoulias’ Management Of Bright Start: “[H]ow Can He Ask Us To Trust Him With The Nation’s Business In Washington When He Couldn’t Even Protect The People’s Money In His Job As Treasurer.” “Hoffman questioned Giannoulias’ job performance as state treasurer, pointing to investment losses in a college-savings program. . . . ‘Fundamentally, I don’t know how he can ask us to trust him with the nation’s business in Washington when he couldn’t even protect the people’s money in his job as treasurer,’ Hoffman said.” (Deanna Bellandi, “4 Democrats Seeking Ill. US Senate Seat Debate,” The Associated Press, 12/16/09)

• Hoffman “Said That As Giannoulias Ran Bright Start, The State’s College Savings Program, ‘He Invested In Mortgage-Backed Securities And Junk Bonds After Telling Parents That Their Money Was Safe.’” (Abdon M. Pallasch, “Foe Rips Giannoulias In Senate Race Debate,” Chicago Sun Times, 12/17/09)

• Hoffman Campaign: “The Last Thing We Need In The Senate Is Someone Too Inexperienced And Reckless To Protect Money Hard Working Citizens Of Illinois Invested In Order To Provide Their Children With An Education. Mr. Giannoulias has demonstrated his immaturity by misleading the public about the extent of the losses and never taking responsibility for this massive loss.” (Hoffman For Illinois, “Statement From Hoffman Campaign On Bright Start Settlement,” Press Release, 12/22/09)

• Hoffman Campaign: “There Is No Bigger Failure During His Time As Treasurer Than His Mismanagement Of Bright Start, The College Savings Program For Families Who Aspire To Send Their Children To College.” (Hoffman For Illinois, “Giannoulias’ TV Ad Makes Questionable Claims About Bright Start,” Press Release, 1/4/10)

Giannoulias Touts His Refusal Of Federal Lobbyist Donations, But He Accepts Donations From State Lobbyists And Other Special Interest Groups:

Giannoulias Does Accept Donations From State Lobbyists.Chicago Sun-Times, 7/21/20) (Abdon Pallasch, “Giannoulias Radical Ethics Plan,”

In His Senate Campaign, Giannoulias Has Taken Over $1 Million From The Lawyers And Lobbyists Industry. (Center For Responsive Politics, www.opensecrets.org, Accessed 9/8/10)

• “Mr. Giannoulias Insisted His Own Fundraising From Special Interests Is Different, Even Though He Just Returned From A West Coast Swing That Included A Stop At A Trial Lawyers Convention And Fundraiser In Vancouver, British Columbia. The Trip Was Disclosed Not By Mr. Giannoulias, But By A Republican Press Release.” (Greg Hinz, “Giannoulias Rips Kirk Over Financial Reform Vote,” Chicago Business Crain’s Blog, 7/15/10)

• Giannoulias Was Accompanied On The Trip By The Head Of The Chicago Federation Of Labor, Which Giannoulias Insists Is Different From A Corporate PAC. “Mr. Giannoulias was accompanied at his press conference by Jorge Ramirez, the new head of the Chicago Federation of Labor. The CFL or affiliated unions have major Giannoulias donors and are expected to play a big role in his campaign. Mr. Giannoulias said the CFL is different from a corporate PAC because labor unions ‘are not in it for profit.’” (Greg Hinz, “Giannoulias Rips Kirk Over Financial Reform Vote,” Chicago Business Crain’s Blog, 7/15/10)